Emerson blasts Top End plan

Personal tax rebates of up to $10,000 to lure workers to northern Australia remain under consideration by the Coalition as Tony Abbott quickly moved to distance himself from other controversial proposals in a leaked discussion paper sent to state premiers by one of his own frontbenchers.

The federal Opposition Leader tried to play down the status of the embarrassing leak - which also floated ideas such as moving federal public servants to Darwin, Cairns and Karratha and cutting $800 million from the foreign aid budget to build medical centres in the north.

The Coalition rejected zonal taxation - different tax rates in different regions - and also the forced relocation of public servants and the cuts to foreign aid - even though the discussion paper proposing the measures was circulated by the opposition finance spokesman, Andrew Robb, only last month, with a view to releasing a formal policy early this year.

Tony Abbott in Parliament on Wednesday. Photo: Alex Ellinghausen

But Mr Abbott confirmed he was considering a trial of increased personal tax rebates in some remote regions, something he promised independents Bob Katter, Rob Oakeshott and Tony Windsor as he tried to convince them to support him to form government after the 2010 election.

Advertisement

Then the Coalition intended to trial rebates in five local government areas and assess whether they boosted population and economic growth. The value of existing remote region tax rebates has eroded to as little as $57 a year.

Coalition sources also said changes to rules governing temporary 457 visas were being considered, perhaps allowing workers to stay for five years - beyond the timeframe of the job they originally came to Australia to do - if they promised to stay in the north.

The policies raised immediate concerns in Liberal ranks, where some MPs pointed out that northern mining centres were already booming, while states like Tasmania and South Australia were recording lower than national average economic growth, and that very high wages already offered were failing to attract enough workers to remote mining towns.

Labor ridiculed the plan, calling Mr Abbott ''troppo Tony'' and accusing him of adopting a ''thought bubble'' developed by mining billionaire Gina Rinehart.

Many of the ideas in the leaked discussion paper have been strongly advocated by Ms Rinehart's ''Australians for Northern Development and Economic Vision'' policy think tank.

Mr Abbott said he had not discussed the policy with Ms Rinehart, but would be comfortable if his frontbenchers had.

''Look, if they had, I would be perfectly happy about that because I think that we should be prepared to listen to everyone and obviously Gina has made a terrific contribution to northern development with some of the mines that she has pioneered,'' he said.

The Coalition's regional development spokesman, Senator Barnaby Joyce, who has advocated zonal taxation since his maiden speech, said being a ''Joh Bjelke-Petersen idea'' was ''a great recommendation because I think Joh Bjelke-Petersen was a brilliant politician''.

The Minister for the Public Service, Gary Gray, pointed out that 60 per cent of the federal public service already worked outside Canberra, including 22,000 in Sydney.